Why is Akamai Technologies stock rallying today?

Investing.com ·

Why is Akamai Technologies stock rallying today?

Investing.com -- Akamai Technologies stock rose 5.0% in pre-open trading after the company reported Q3 2026 results that beat earnings expectations and disclosed a transformative $11.6 billion, seven-year cloud infrastructure agreement with AI company Anthropic — the centerpiece of more than $14 billion in multi-year Cloud Infrastructure Services commitments signed across 2026. CEO Tom Leighton highlighted the company’s momentum, noting that the CIS pipeline supports an expectation of 17%–22% overall revenue growth in 2027 and total revenue exceeding $7 billion in 2028. Quarterly non-GAAP EPS came in at $1.77, topping the $1.67 analyst consensus, while revenue of $1.122 billion rose 6% year-over-year and met expectations.

The recovery was tempered by a mixed analyst response to Q4 guidance, which fell below consensus due to shipment and build-out delays pushing some CIS revenue into 2027. Guggenheim reiterated its Buy rating with a $225 price target, viewing the long-term CIS ramp as intact, while DA Davidson maintained its Buy stance but trimmed its target to $125. UBS and Scotiabank both cut their price targets — to $90 and $120, respectively — citing supply constraints, though both maintained constructive ratings. Susquehanna also reduced its target to $90 while keeping a Positive rating. Critically, the stock had already shed roughly 16% over the prior week and was hovering near its 52-week low, making the Anthropic deal’s scale and the strong multi-year outlook a meaningful relief catalyst for oversold shares.

The broader market backdrop was volatile but offered a partial tailwind. Thursday’s session had seen a severe AI-driven selloff — with the Nasdaq falling sharply into correction territory — following Democratic midterm election victories by candidates perceived as unfriendly to the AI sector. By Friday’s pre-market, however, Nasdaq futures were rebounding, with the NASDAQ Composite up 1.5% and the S&P 500 edging up 0.2%, even as the Dow remained under pressure. Investors were also awaiting the October jobs report ahead of the opening bell, adding an element of macro uncertainty to the session.

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